What RBI’s surveys tell about India’s economy?
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What RBI’s surveys tell about India’s economy?
Subject :Economy
Section: Monetary Policy
Context:
The RBI unveiled its latest monetary policy review as well as seven surveys that help it ascertain how the economy is doing.
Details:
- Trade Survey:
- Widening trade deficit-
- Impact of rising trade deficit:
- It is one of the main reasons for the depreciation of the Indian rupee.
- India’s Current Account Deficit (CAD) is expected to rise from 1.2% of GDP in 2021-22 to around 4% (of the GDP) in 2022-23.
- Consumer Confidence Survey (CCS):
- The CCS asks people across 19 cities about their current perceptions and one-year ahead expectations on the general economic situation, employment scenario, overall price situation and own income and spending.
- Based on the responses, the RBI comes up with two indices: the Current Situation Index (CSI) and the Future Expectations Index (FEI).
- An index below the 100 mark implies people are pessimistic and a value higher than 100 conveys optimism.
- The CSI has been recovering since falling to a historic low in July 2021. However, consumer confidence still remains in the negative territory.
- The FEI is in the positive territory but stays below the pre-pandemic levels.
- Inflation Expectations Survey (IES)
- It tracks people’s expectations of inflation.
- It shows that the households’ inflation perception for the current period has moderated along with their three months and one-year ahead median inflation expectations.
- It tracks people’s expectations of inflation.
- Order Books, Inventories and Capacity Utilisation Survey –OBICUS Survey
- It attempts to provide demand conditions in India’s manufacturing sector on a quarterly basis.
- A low level of Capacity Utilisation implies that manufacturing firms can meet the existing demand without needing to boost production. This in turn would have negative implications for job creation and private sector investments in the economy.
- According to the latest report the CU is above the pre-pandemic level — suggesting India’s aggregate demand is recovering steadily.
- Industrial Outlook Survey (IOS)
- It is a qualitative assessment of the business climate by Indian manufacturing companies.
- It shows that the businesses were optimistic (above the 100 level) in Q1, although not as much as they were in the recent past.
- It is a qualitative assessment of the business climate by Indian manufacturing companies.
- Services and Infrastructure Outlook Survey (SIOS)
- It is a qualitative assessment of how Indian companies in the services and infrastructure sectors view the current situation and the future prospects.
- It shows that the companies in the services space are far more optimistic than the companies in the infrastructure sector.
- It is a qualitative assessment of how Indian companies in the services and infrastructure sectors view the current situation and the future prospects.
- Bank Lending Survey (BLS)
- It is a qualitative assessment and expectations — of major scheduled commercial banks (SCBs) on credit parameters like-loan demand and terms & conditions of loans for major economic sectors.
- It shows that the bankers’ assessment of loan demand remained positive for all major sectors.
- It is a qualitative assessment and expectations — of major scheduled commercial banks (SCBs) on credit parameters like-loan demand and terms & conditions of loans for major economic sectors.
- Survey of Professional Forecasters (SPF)
- It is a survey of 42 professional forecasters (outside the RBI) on key macroeconomic indicators such as GDP growth rate and inflation rate in the current year and the next financial year.
- India’s real GDP is expected to grow by 7.1 per cent in 2022-23 and 6.3 per cent in 2023-24.
- It is a survey of 42 professional forecasters (outside the RBI) on key macroeconomic indicators such as GDP growth rate and inflation rate in the current year and the next financial year.